Despite good quarterly figures, SAP is increasingly in trouble: There’s a lot of rumblings

SAP does not come to rest due to product problems

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SAP can’t catch a break because of product problems. Most certainly to the delight of its competitors. The two most recent, thoroughly positive announcements “Google relies on SAP“, a cooperation with Microsoft as well as the successful quarterly figures Q1 2021 have hardly faded away when there is a huge creak in the woodwork.

The reproach for a product on the French market reports tageschau.de:

“Many companies have had bad experiences with the introduction of SAP software – apparently too many. Because in a court case in France, SAP supervisory board members now want to testify against the company.”

And, if that proves true, then one quite quickly the VW diesel scandal. Surely this is not to be compared. But, if former supervisory board members of SAP against their former group express themselves critically, then for the board around Christian Klein “red alert” is announced.

SAP does not come to rest due to product problems – What are the accusations or what writes Tagesschau.de:

“It is about the SAP software Chorus. This accounting and financial software had the French Ministry of Defense installed in 2009. The program worked so incorrectly that invoices were paid late or not at all. The disaster caused numerous service providers in France to go bankrupt.

One of them is Lionel Bieder. His cleaning company went bankrupt in 2013 because the ministry failed to pay invoices worth millions, the cash flow stalled and customers dropped out. As a result, the 50-year-old sued the French state for 20 million euros in damages. “More than 1,000 small and medium-sized companies collapsed, and Chorus destroyed more than 15,000 jobs,” Bieder says. He himself has had to lay off about 300 people.”

SAP can’t catch a break because of product problems

As a market observer, one feels and hears critical voices for a long time. Only loudly say, hardly someone wanted or will something. Only the DSAG, the mouthpiece of SAP users, has repeatedly put its finger in SAP’s wounds. If you haven’t heard the DSAG’s complaints, all you have to do is enter a few keywords and you’ll quickly find what you’re looking for. E.G.

• From 2012: DSAG criticizes HANA strategy
• From 2017: DSAG criticizes SAP statement on “indirect use”
• From 2019: Users no longer understand SAP
• From 2020: SAP must quickly deliver on its promises

On the research, one then automatically comes across some critical proceeding, German projects:

• From 2018: This is how “Elwis” died: background on Lidl’s SAP withdrawal
• From 2018: The long list of difficult and failed SAP projects
• From 2019: HARIBO – SAP’s guinea pig?
• From 2020: How SAP software is getting “Rama” into trouble

And those are just a few examples: The entire list of publicly voiced accusations is quite long. Sure, SAP has also always responded and promised improvement. But that is precisely the core problem.

On the other hand, how satisfied are SAP customers really?

As always, the press likes to write about what went wrong. The positive projects and deals often go unmentioned. But there also aren’t that many SAP customers who loudly express their absolute satisfaction. There are, sure. But for the size of SAP, they don’t seem to be that many.

The recurring accusation: From the user’s point of view, a lot is promised, but often little is delivered. They feel that SAP is very expensive and offers far too little benefit. Or it takes a very long time before everything works to satisfaction.

What about the CRM area?

When we carry out our CRM projects, it is very often the ERP from SAP that has to be connected. Therefore, for political reasons alone, SAP is allowed to play in the selection phase with its CRM product C4C. But SAP has only won once with its CRM in the tenders we have carried out in 18 years.
SAP has been a driven force for years. a) because of its own past and b) the tendency to gigantomania and c) doomed to constant growth because of the stock market price.

However, the product policy always seems to be delayed or improved only after loud lamentations. Especially with the CRM C4C, they tried again and again to take the big leap and catch up with Salesforce or Microsoft. But it simply doesn’t work. And in the core product ERP, there is always a lot of rattling around.

The next attempt by the SAP board to get calm in the box is the initiative “RISE with SAP“. You can watch what that is here as a video.

What are mentioned in the video as the most important key figures:

Approximately 70% to 80% of SAP customers are still on SAP’s legacy ERP program. The age of the installed solution is on average 7 years old. This means: it is virtually a Herculean act to convert these many customers to SAP S/4HANA.

From today’s perspective, all that remains to be said is that Christian Klein’s predecessors laid him a nice big rotten egg in the nest. This was foreseeable and could have, indeed should have, been prepared strategically. As is so often the case, more attention was paid to new customers and less to existing customers. Now the pressure is only increasing.

And in times of tight budgets (e.g. because of Corona) this is a reason for users to consider other providers instead of SAP.

SAP can’t catch a break because of product problems – Conclusion:

Depending on how the court ruling turns out, a critical avalanche could start rolling for SAP. Whether this then ends in a wave of lawsuits, I dare to doubt though. SAP’s lawyers and customer advisors will try to deflect this or negotiate compromise proposals. But it could very well be expensive. Especially since the money for further developments and RISE with SAP will be missing.

And – this will make the competition happy again – SAP is more concerned with itself than with its customers.